The Government Finance Officers Association (GFOA) has had a long-standing policy opposed to the issuance of tax-exempt obligations by state and local governments for the sole or primary purpose of investing the proceeds in taxable securities to yield a profit. Changes in the municipal bond market, including those resulting from the 1986 Tax Reform Act, make it appropriate that this policy should be extended to reflect these changes.

The GFOA is opposed to the issuance of tax-exempt securities by state or local governments for the sole or primary purpose of investing the proceeds in higher yielding obligations, whether taxable or tax-exempt, in order to make a profit from the investment.

• Publication date: May 1988